(a)OR(b)

Distinguish between Factor Income and Transfer Income.

Factor income is the income received by the factors of production for rendering their services to the firms.

Whereas, transfer income is unilateral income received without rendering any goods and services.

Domestic Income is the money value of all the final goods and services produced within the domestic territory by residents/non-residents of a country during an accounting year.

Whereas, National Income refers to money value of all the final goods and services produced by the normal residents residing within/outside a country, during an accounting year.